SEC. 2. Section 100 of the Probate Code is amended to read:
(a) Upon the death of a married person, one-half of the community property belongs to the
surviving spouse and the other half belongs to the decedent.
(b) Notwithstanding subdivision (a), a husband and wife may agree in writing to divide
their community property on the basis of a non pro rata division of the aggregate value of
the community property or on the basis of a division of each individual item or asset of
community property, or partly on each basis. Nothing in this subdivision shall be
construed to require this written agreement in order to permit or recognize a non pro rata
division of community property.
This change to the Probate Code seems to make it possible to fund the by-pass trust to
the full exclusion amount using non retirement assets in situations where a couple's only
assets are a million dollar home (CP) and a million dollar IRA owned by one spouse. There
may be difficulties with valuation discounts and income tax and there may need to be
changes to trust and will documents. Check with your attorney.
GEORGIA
- Georgia has adopted legislation which conforms the state income tax code with the IRC as
of the beginning of 1998. Consequently, state and federal provisions, including the
technical corrections enacted July 22, 1998, should be identical. Reference: Act 923.
HAWAII
- Hawaii has adopted legislation which conforms the state income tax code with the IRC as
of the beginning of 1998. Consequently, state and federal provisions, including the
technical corrections enacted July 22, 1998, should be identical. Reference: Act 113.
IDAHO
- Idaho has adopted legislation which conforms the state income tax code with the IRC as
of the beginning of 1998. Consequently, state and federal provisions, including the
technical corrections enacted July 22, 1998, should be identical. Reference: House Bill
489.
INDIANA
- Indiana has adopted legislation which conforms the state income tax code with the IRC as
of the beginning of 1998. Consequently, state and federal provisions, including the
technical corrections enacted July 22, 1998, should be identical. Reference: House
Enrolled Bill 1157.
IOWA
- Iowa has adopted legislation which conforms the state income tax code with the IRC as of
the beginning of 1998. Consequently, state and federal provisions, including the technical
corrections enacted July 22, 1998, should be identical. Reference: Senate File 2357.
KENTUCKY
- Kentucky has adopted legislation which conforms the state income tax code with the IRC
as of the beginning of 1998. Consequently, state and federal provisions, including the
technical corrections enacted July 22, 1998, should be identical. Reference: House Bill
170.
MAINE
- Maine has adopted legislation which conforms the state income tax code with the IRC as
of the beginning of 1998. Consequently, state and federal provisions, including the
technical corrections enacted July 22, 1998, should be identical. Reference: Legislative
Document 1908/S.P. 688.
MASSACHUSETTS
- Massachusetts has adopted the federal legislation as part of the state code. However,
additional legislation may be required to adopt the technical corrections enacted July 22,
1998. Hence, there are probably differences between federal and state provisions.
Reference: House Bill 5709.
MINNESOTA
- Minnesota has adopted legislation which conforms the state income tax code with the IRC
as of the beginning of 1998. Consequently, state and federal provisions, including the
technical corrections enacted July 22, 1998, should be identical. Reference: House File
3840.
NEW JERSEY
- New Jersey has adopted the federal legislation as part of the state code. However,
additional legislation may be required to adopt the technical corrections enacted July 22,
1998. Hence, there are probably differences between federal and state provisions.
Reference: Senate Bill 840.
NORTH CAROLINA
- North Carolina has legislation pending which would conform the state income tax code
with the IRC as of the beginning of 1998. Consequently, a Roth conversion probably
generates taxable income at the time of conversion and may attract early distribution
penalties. In addition, future growth within the Roth IRA account may be subject to state
income tax. Get advice from a local practitioner before contributing or converting to a
Roth IRA. Reference: Senate Bill 1227 and House Bill 1326.
OREGON
- Oregon will take no action before 1999. Consequently, a Roth conversion probably
generates taxable income at the time of conversion and may attract early distribution
penalties. In addition, future growth within the Roth IRA account may be subject to state
income tax. Get advice from a local practitioner before contributing or converting to a
Roth IRA.
SOUTH CAROLINA
- South Carolina has adopted legislation which conforms the state income tax code with the
IRC as of the beginning of 1998. Consequently, state and federal provisions, including the
technical corrections enacted July 22, 1998, should be identical. Reference: Act 268.
WEST VIRGINIA
- West Virginia has adopted legislation which conforms the state income tax code with the
IRC as of the beginning of 1998. Consequently, state and federal provisions, including the
technical corrections enacted July 22, 1998, should be identical. Reference: Senate Bill
207.
WISCONSIN
- Wisconsin has adopted legislation which conforms the state income tax code with the IRC
as of the beginning of 1998. Consequently, state and federal provisions, including the
technical corrections enacted July 22, 1998, should be identical. Reference: Act 237.
_________________________________
This summary is not a complete discussion of the issues nor is it a
full recitation of state and federal tax laws and regulations. Review your personal
circumstances with your tax adviser before contributing or converting to a Roth IRA.
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